Thermoforming assets are bought by RV supplier
Bringing enlargement and expansion in the recreational vehicle industry, Drew Industries Inc. plans to improve its stake in thermoformed RV components through an attainment and acquisition.
Drew declared and announced on Feb. 27 that its Lippert Components Inc. subsidiary has agreed in principle to buy assets and the business of Star Design LLC.
Star Design of Elkhart, Ind., thermoforms components for the RV and bus and specialty vehicle industries. Its sales on basis of every year are about $10 million.
Drew’s subsidiaries have been on spreading out spree riding recent and projected growth in RV markets. In the past few months, the companies have made acquisitions in metal and electronic RV components. In middle of 2012, Drew bought Agile Vehicle Modifications Inc., a plastic parts and tooling operation in Elkhart, to complement its Kinro Inc. subsidiary, a Goshen, Ind., producer of vinyl and aluminum windows and doors, and acrylic bathware for RVs and manufactured housing.
Drew is situated in Elkhart, arguably the center of gravity of the U.S. RV manufacturing industry. RV retail sales growth is seen 14 percent last year and further growth is forecast for 2014. Drew derives more than 85 percent of its sales by supplying a wide range of RV components to major sectors, saw that market drive a 12 percent sales increase last year to a total of $1.02 billion. Drew’s sales to the motor homes sector solely rose by 30 percent in 2013.
Previous summer, Drew moved some of its thermoforming capacity from Waxahachie, Texas, to Elkhart, where it renovated a 103,000-square-foot building to house the thermoforming assets. The new Elkhart facility produces wheel-well liners, storage boxes and bathware for customers in Lippert and Kinro. Drew said that the Elkhart location will hold up thermoforming development. The Texas plant now has more space for axle production, but it continues to make windows and thermoformed parts for non-RV markets.
Drew’s subsidiaries have another key market as manufactured housing. Drew is a player in boat trailers and components for buses and specialty vehicles also. On the whole, Drew now runs 32 factories in the U.S.
Drew anticipates the purchase of Star Design would be closed within 30 days. The purchase price will be about $12 million in ready money (cash) and borrowings. Drew did not disclose which Star Design assets Lippert will purchase or whether Star Design’s Elkhart plant will continue in operation. Lippert also is based in Elkhart. Star Design President Kevin Gipson will keep continue with the business but Star Design Chairman Kelly Rose will not be.
Drew President Scott Mereness stated in a news release that Star Design will help Drew’s growth in RV and other specialty markets.
Rose said in a news release:
“Star Design has experienced strong growth in the past few years, and we are confident Lippert Components will continue to strategically drive the business forward,” Star Design buys sheet made from thermoplastic polyolefins, ABS, polypropylene and polyethylene for thermoforming processes. It also does blow molding in its 44,000-square-foot manufacturing facility. It has been into the thermoforming trade for more than 70 years.